Freedom Foods sells cereal and snacks business to Arnott’s Group

Australia’s Freedom Foods Group has announced the sale of its cereal and snacks assets and liabilities to The Arnott’s Group for A$20m ($15.2m) in cash.

As part of the deal, The Arnott’s Group will acquire cereal and snacks manufacturing facilities in Leeton and Darlington, New South Wales (NSW), as well as a facility in Dandenong, Victoria.

The deal also includes brands associated with the business such as Freedom Foods, Messy Monkeys, Heritage Mill, Arnold’s Farm and Barley+.

However, the deal does not include the Crankt Protein brand, which will continue to be part of Freedom Foods’ portfolio.

Freedom Foods Group interim CEO Michael Perich said: “We believe the Cereal and Snacks business will thrive under an owner such as The Arnott’s Group, which is committed to investing in the business and employees to ensure a sustainable and successful future.

“This decision is consistent with the new executive team’s strategy of simplifying both our business structure and product range to ensure we are maximising growth opportunities in Dairy and Nutritionals and Plant-based beverages.”

The divesture is part of the Freedom Foods’ strategy to simplify its business structure and product range, as well as increase profitability and prioritise growth opportunities.

As part of the deal, the majority of the employees associated with cereal and snacks business will transition to Arnott’s Group.

Freedom Foods added that there could be some redundancies.

The final number will be decided by the company before finalising the transaction after carrying out consultations with the employees.

The Arnott’s Group CEO George Zoghbi said: “This purchase of manufacturing sites and leading consumer brands from Freedom Foods Group will accelerate our strategy of entering new product categories and unlock innovation to benefit customers and consumers.

“This will add three Australian manufacturing sites to our already well-invested domestic supply chain. Once the purchase is finalised, our domestic manufacturing network will extend across eastern Australia from Virginia in Queensland, Huntingwood, Leeton and Darlington Point in NSW to Shepparton and Dandenong in Victoria and Marleston in South Australia.”

Completion of the deal is expected to place on 1 March 2021, subject to the satisfaction of customary conditions.

Upon completion of the sale, Freedom Foods will change its corporate name.